US firms doing business in China mostly oppose tariffs

A couple waits to cross a road in Beijing’s central business district on July 12. Most US businesses operating in China oppose the use of tariffs in retaliation for the challenges they face, from an uneven playing field to poor protection of intellectual property rights, a survey showed yesterday. — AFP photo

SHANGHAI: Most US businesses operating in China oppose the use of tariffs in retaliation for the challenges they face, from an uneven playing field to poor protection of intellectual property rights, a survey showed yesterday.

Almost 69 per cent of the 434 respondents to the annual China Business Climate Survey of the American Chamber of Commerce in Shanghai opposed tariffs, while just 8.5 per cent backed them, the body said.

“Resolving these challenges in an equitable manner is essential for the United States and China to have a healthy long-term commercial relationship that brings benefits to both our peoples,” it said in a statement on the survey results.

The survey, conducted between April 10 and May 10, reflects the mix of key concerns and realities for American businesses in China at a time of heightened uncertainty as the Trump administration raises the ante in its trade war with Beijing.

US President Donald Trump has accused China of unfair trade practices that give its firms an advantage, while hobbling American companies and creating an outsized trade deficit for the United States.

On Tuesday, the office of the US Trade Representative said it would impose 10 per cent tariffs on an extra US$200 billion worth of Chinese imports, from food products to tobacco, chemicals, coal, steel and aluminium.

The survey showed that while US companies continue to face challenges in China, 34 per cent of respondents felt Chinese government policies toward foreign companies had improved, up from 28 per cent last year.

The number of companies that felt policies had worsened for foreign firms fell to 23 per cent from 33 per cent, although 60 per cent of respondents felt China’s regulatory environment lacked transparency, on par with last year.

Insufficient intellectual property rights protection and the need to get licences were the top two regulatory challenges, although slightly fewer companies found both to be a hindrance in the 2018 poll, compared with that of 2017.

To force greater market access, 42 per cent of respondents favoured investment reciprocity, up from 40 per cent last year.

But the number opposing it also grew, to 16 per cent, from 9 per cent last year. — Reuters